1. Have open, active accounts that are in good standing.Your credit score is a measure of how well you’ve handled credit accounts in the past. You won’t have a good credit score if you don’t have any accounts or if all the accounts you do have are closed or delinquent. Adding good accounts to your credit report will boost your credit score. That may mean starting over with a secured credit card or another other credit card for bad credit.
2. Pay all your bills on time - even those that aren't not on your credit report.
The biggest thing influencing your credit score is your payment history. The more timely payments you add to your credit history, the more your credit score will improve. Even one late payment may signal that you haven’t changed your bad credit habits, so be sure to pay on time every time.
It's important that you also pay accounts not listed on your credit report since they can be added eventually if you fall behind.
3. Keep your accounts out of collections.Debt collection accounts are one of the most serious types of delinquencies you can have. Since any account – even a small library fine or your kid’s cafeteria fees – has the potential to wind up on your credit report, it’s important that you pay all your debts or at least make payment arrangements with the biller.
4. Reduce your balances and keep them low.The amount of debt you have is another factor that impacts your credit score in a major way. Lower balances are better for your credit score, so if you have big balances, pay them down. Consumers with the best credit scores have balances that are less than 10% of their credit scores, so aim to get your balances to that point or lower.
5. Make sure your credit limits are reported correctly.
Not only does the the amount of debt you have affect your credit score, the ratio of your credit card debt to the limit on those credit cards is also a factor. If your credit limits aren’t reported accurately, it can look like you’ve maxed out your credit card. You can dispute inaccurate credit limits with the credit bureau or call your creditor to ask why your credit limit isn’t reported accurately.
Some people ask for credit limit increases as a way to improve their credit utilization – the ratio of your credit card balances to credit limits. But, be careful requesting your limit be increased. Some credit card issuers do a hard pull where an additional inquiry is placed on your credit report and factored into your credit score. Soft pulls are better, but may not be what the creditor needs to process your credit limit increase request.